Page 54 - AAE PR REPORT December 2023

12/19/23, 9:56 AM What is the unemployment insurance scheme in the UAE?
claims are only capped at 12 months. This means that, throughout your employment in the UAE,
you can only receive a maximum of 12 months’ compensation from the insurance scheme.

2. Long eligibility period

You must pay insurance premiums for at least 12 consecutive months before becoming eligible for
compensation. On the one hand, such an extended eligibility period can be advantageous for
securing a more stable and reliable insurance pool. However, it may also pose challenges for those
who lose their job before completing the 12 months.

3. Payouts are deemed inequitable

The UAE has no federal minimum wage. And this becomes especially an issue in the fairness of the
scheme’s payouts. Advocacy organization Migrant-Rights.org emphasized, “Because the payouts
are based on a percentage of the basic salary, while the fees are fixed, low-income workers who pay
the same amount into the scheme as the middle to higher-income are only eligible for a far smaller
claim.”

4. The burden is on employees

Under the UAE unemployment insurance scheme, you, the employee, will pay the insurance
premium. Your employer won’t have to pay any fee or cost. Note that you could pay fines for non-
compliance and late payments. According to regulations, non-enrolment has a penalty worth $108.
There will be an additional $54 if enrollees fail to pay dues after a grace period of 90 days. The fines
will be deducted from your salary or end-of-service pay. Your policy will also be canceled.
Furthermore, you may face potential difficulties when renewing work permits.

Read: Building a resilient labor market amidst growing challenges

Advantages of unemployment insurance in UAE

Though challenges remain, the country’s unemployment insurance scheme is a laudable effort. Here
are its best perks.

1. Enhanced social protection

By giving substantial income support during periods of unemployment, the government underscores
its commitment to looking after the overall well-being of Emirati employees — and even non-

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